Addressing threats to health care's core values, especially those stemming from concentration and abuse of power. Advocating for accountability, integrity, transparency, honesty and ethics in leadership and governance of health care.

Tuesday, June 09, 2015

There are so many things wrong with US and global health care that it is easy to get lost in the details, and despair of finding solutions. Keep in mind, however, that the intractability of many of the problems may be quite man made. Many problems may persist because the status quo is so beneficial to some people.

The Current Troubles at UPMC

Consider, for example, the troubles that have recently plagued UPMC, the giant health care system in western Pennsylvania. In the last month, the following reports have appeared.

Personal data may have been stolen from more than 2,000 UPMC patients by
an employee of an outside company the hospital giant used to handle
emergency room billing, the latest in a string of data thefts to hit
Pittsburgh health companies.

Note that this was only the most recent data breach at UPMC,

UPMC was the victim of a data breach last year in which Social Security
numbers and other sensitive data from all 62,000 UPMC employees were
stolen when thieves hacked into an employee database at the health
system.

The confidentiality of patient records is a major responsibility of health care professionals and hospitals. Yet UPMC does not seem to be doing a good job in protecting such confidentiality.

Health system UPMC will defend its decision to cut 182,000 seniors from its provider network at a Commonwealth Court hearing May 27 in Harrisburg.

The hearing will determine whether UPMC complied with a consent decree that was reached last year and intended to protect 'vulnerable' populations from fallout of the messy Highmark-UPMC divorce. The seniors have Medicare Advantage coverage through UPMC rival Highmark Inc., and most commercial contract relations between the two health care titans ended Dec. 31.

The system—which has also cut its hospital capacity in recent months—offered 3,500 workers voluntary buyouts to 'achieve cost-savings for UPMC by adjusting our workforce to meet the demands of the healthcare marketplace,' said spokeswoman Gloria Kreps.

Not mentioned by UPMC spokespeople were the possible effects on patient care of cutting about 5% of the most experienced members of the UPMC workforce.

The law firm that represents UPMC in many civil matter was disqualified from a medical malpractice cast this week after a judge found that an attorney from Dickie, McCarney & Chilcote improperly spoke with and advised a witness.

This does not say a lot for how UPMC managers pick legal counsel and manage their seemingly many legal defenses.

A national organ-sharing group has put UPMC's
lung transplant program on probation for a year, listing concerns about
how the program handled donated organs.

The United Network for Organ Sharing cited
14 cases in 2013 and 2014 when the hospital system accepted lungs that
UPMC doctors later found could not be transplanted in intended
recipients, said Dr. Jonathan D'Cunha, UPMC's lung transplantation
surgical director.

UPMC kept the organs for other patients in
UPMC Presbyterian in Oakland, an approach approved by regional organ
procurement groups that supplied the lungs, D'Cunha said. But UNOS, a
nonprofit that manages the American organ transplant system, objected to
what it called 'an unusually high number of instances' of the practice.

Probation ordered by the board of UNOS and
the Organ Procurement and Transplantation Network took effect Monday,
according to UNOS.

D'Cunha said the transplant program remains fully operational but will be operating under a corrective-action plan.

This was not the first trouble that a UPMC transplant program has encountered. As the Pittsburgh Post-Gazette reported,

This is the second time UPMC has been placed on probation for a transplant problem.

In 2011, it was placed on probation ... after disease was transferred from a living kidney donor to a recipient.

Note that while the first instance of probation seemed to suggest competency issues, the latest one seems to be about ethical issues. By transplanting kidneys into immediately available UPMC patients who may have lower priorities than other patients on the list, UPMC may be disfavoring patients from "outside," whose transplants, incidentally, would not generate much revenue for UPMC.

An editorial in the Post-Gazette suggested while UPMC "pleads ignorance" about these rules, "Western Pennsylvania's largest hospital network should have known better."

Just Another Bad Month?

Thus it was just another bad month at the office for UPMC management. But UPMC management has had lots of bad months. For example, since 2011, we have previously discussed
- Fantastical musing by the UPMC CEO about health care run by computers, not doctors (look here)
- Fantastical claims by UPMC in response to a lawsuit that is has no employees (look here)
- Numerous malpractice cases filed against UPMC related to problems with its electronic medical records (look here, here, here, here)
- Layoffs at UPMC due to problems with its electronic medical records (look here)
- A lawsuit by the Mayor of Pittsburgh claiming UPMC should be stripped of its non-profit status (look here).

The $6.4 Million CEO, and the Other Million Dollar Managers

One would think that these series of events, all in a short time, coupled with all these previous stories, might raise questions about who is running the institution, and what they are being paid.

Instead, however, the Pittsburgh Tribune-Review published a story on May 15, 2015, about just how well paid top UPMC managers continue to be.

UPMC's Jeffrey Romoff banked total compensation of $6.4 million two years ago, ranking the chief executive's pay among the nation's highest for nonprofit health leaders.

The 69-year-old Romoff was one of 31
employees of Western Pennsylvania's largest integrated health system to
be paid more than $1 million in 2013,...

Romoff's 2013 pay, which included a base
salary of nearly $1 million plus $5 million in incentives and deferred
income, was down 3 percent from the previous year but well above the
median compensation for a nonprofit hospital CEO.

The defense of Mr Romoff's compensation followed the same pattern we have discussed repeatedly. Justifications for exceedingly generous compensation for health care managers, particularly of non-profit hospital, often are superficial, limited to talking points we have repeatedly discussed, (first
here, with additional examples of their use here, herehere,here, here,here, here, and here.) These are:
- We have to pay competitive rates
We have to pay enough to retain at least competent executives, given how hard it is to be an executive
- Our executives are not merely competitive, but brilliant (and have to be to do such a difficult job).

So,

UPMC spokeswoman Susan Manko wrote in an email that compensation for the company's executives is tied to performance that is based on 'clearly defined goals, including quality of care, community benefit, financial measures and other key factors.' Pay takes into consideration what other industry executives are making, she noted.

However, the clearly defined goals including putting the transplant on probation twice, having several electronic data breaches, trying to discharge the most experienced employees, being sued for being a non-profit in name only, being subject to numerous malpractice suits, and having one law firm used to defend one of these suits disqualified, and dumping hundreds of thousands of elderly, "vulnerable" patients? Really?

A fair comparison was to other overpaid managers, not to the dedicated health care professionals who make the system work? Really?

Also, as the Pittsburgh-Tribune Review reported on February, 2015, the Chairman of the Board of UPMC, Nicholas Beckwith, thinks Mr Romoff is a

brilliant leader and stood by the board's decision to pay Romoff $6.6 million a year, among the highest CEO salaries for nonprofits in the region.

Furthermore,

'When people ask me about his pay, I say, ‘What would you pay him?'' Beckwith said. 'If they're going to understand the brilliance of Jeffrey Romoff, they have to acknowledge there's no more effective leader in the nation than Jeff Romoff.'

So here was the "brilliance" talking point really writ large. The most effective leader in the entire US? Really?

At best, Mr Beckwith seemed to be only thinking about the financial performance of UPMC, rather than its clinical performance, its ethical performance or its effects on patients and their outcomes. But then again, Mr Beckwith might not know much about that,

Beckwith worked as a salesman for Murrysville-based Beckwith Machinery and eventually became its CEO.

Perhaps UPMC should consider offering buyouts to that group of egotists who inhabit the upper reaches of the U.S. Steel Tower. Then they could move to the next phase of life — old and wealthy.

Summary

So we have presented the recent unpleasantness at UPMC as emblematic of some of the types of unpleasantness that afflict US (and global) health care, including threats to patients' confidentiality and access, problems with quality of health care, possible ethical misconduct, ill treatment of experienced health care staff, etc. Yet consider that despite these multiple failings, and a history of similar failings going back years, the top hired managers of the non-profit hospital health care system are being made millionaires many times over. They clearly are benefiting greatly from the current system, regardless of whether the system benefits others. In fact, one begins to wonder if they are paid well despite the current problems, or because of them?

So one lesson is: every time some new version of health care dysfunction appears in public, think not only about its bad effects on patients, professional values, the public, etc. Think about who is gaining from the current bad status quo.

For a slightly more specific lesson.... In a 2014 interview, corporate governance experts Robert Monks and Nell Minow, Monks said,

Chief executive officers' pay is both the symptom and the disease.

Also,

CEO pay is the thermometer. If you have a situation in which,
essentially, people pay themselves without reference to history or the
value added or to any objective criteria, you have corroboration of... We haven't fundamentally made progress about management
being accountable.

The symptom and the disease have metastasized to health care, from huge
for-profit corporations now also to even small non-profit hospitals.
Thus, like hired managers in the larger economy, health care managers have become "value extractors."
The opportunity to extract value has become a major driver of
managerial decision making. And this decision making is probably the
major reason our health care system is so expensive and inaccessible,
and why it provides such mediocre care for so much money.

One wonders how long the people who actually do the work in health care will suffer the value extraction to continue?
As we have said far too many times - without much impact so far, unfortunately - true health care reform would put in place leadership
that understands the health care context, upholds health care
professionals' values, and puts patients' and the public's health ahead
of extraneous, particularly short-term financial concerns. We need
health care governance that holds health care leaders accountable, and
ensures their transparency, integrity and honesty.

But this sort of reform would challenge the interests of managers who are getting very rich off the current system.

As Robert Monks also said in the 2014 interview,

People with power are very reluctant to give it up. While all of us
recognize the problem, those with the power to change it like things the
way they are.

So I am
afraid the US may end up going far down this final common pathway before
enough people manifest enough strength to make real changes.

But what wou you expect from a not for profit that has circa 25 folks on its payroll taking down more than a $ million a piece, and that babe Concordia who left for cannabis land making upwards of $ 3 million, and that brute Romoff at more than $ 6 million.

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FIRM - the Foundation for Integrity and Responsibility in Medicine is a 501(c)3 that researches problems with leadership and governance in health care that threaten core values, and disseminates our findings to physicians, health care researchers and policy-makers, and the public at large. FIRM advocates representative, transparent, accountable and ethical health care governance, and hopes to empower health care professionals and patients to promote better health care leadership.

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